You found the perfect loan combination for your higher education costs. The federal government and private entities have been loaning people tuition money for so many decades now that the process can be smooth sailing.

But you might be asking yourself, what happens if I’m late on a payment? Will there be financial penalties or even worse, criminal penalties? Will all my hard work be for naught? Will banks and the government forever dog me?

If you are thinking this, congratulations  you’re obviously a responsible human being. Repaying a student loan is not optional  it’s absolutely required, just like a car loan, or a housing mortgage or any other loan.

And first things first: missing a payment or two is serious, but it’s not like defaulting on the entire loan  which we’ll get into in a minute.

The term your lender will use when you are late on a payment  usually defined as more than 90 days late  is delinquent. Once this occurs, you will be reported to national credit bureaus, which can have a negative impact on your credit rating.

270 days is the average length of time for which to be late on your payments to be considered in default. After this, the holder of the loan assumes you don’t intend to repay it, and the default will stay on your credit report for 7 years. If this happens, it will be incredibly difficult to get car loans, credit cards, or financing for a home or renting an apartment.

Of course, there are a couple of intermediary steps that can happen if you’re late on a loan payment. Almost all loans provide the opportunity to discuss your particular issues with a loan officer to work out a solution.

This is also true if you have sent in your payment and it has not shown up on your new statement for some reason, or the amount charged on your current statement does not match up what your understanding of the payment amount should be.

The point is, these are the times when you should contact your loan officer immediately. The loan company has no way of knowing your personal situation unless you tell them directly, and they will certainly not give you the benefit of guessing you’re having an issue or a hard time coming up with the money.

The loan officer or student account counselor will more than likely work with you to formulate a repayment plan that you are able to handle in order not to continue any delinquencies and go into default.

Very often payments that are made, but made late, will incur a late payment fee, and finance charges on the balance, which are frequently higher than the normal interest rate set on the loan.

In addition to the above late payment charges, finance charges or even collection fees, your college or university could put you on a financial freeze if the loan is made through a school affiliate lending program, or your private loan money has not been received by the school for tuition.

A freeze can prevent you from collecting your degree or registering for classes. Your student services (like health care) could also be put on hold.

Again, you will need to make an appointment with your loan officer, who can help you reformulate your payment amount and terms, help you become eligible for a loan deferment, consolidation or even a forbearance  options which allow you to temporarily reduce or postpone your payments.